Overview
- The KOSPI resumed selling on Monday after a record 17.9% one-day rally last week, with the index down about 4–5% intraday as profit-taking returned volatility to Seoul markets.
- The July sell-off wiped roughly 22% off the KOSPI in a single month, its steepest monthly fall since 2008, driven mainly by wild moves in Samsung Electronics and SK Hynix which together make up more than half the index.
- Retail investors piled into AI-linked chip names in May and June using margin loans and new single-stock leveraged ETFs, and forced liquidations of those leveraged positions amplified the July collapse.
- Authorities responded by suspending new single-stock leveraged ETF listings, raising deposit and margin requirements, restricting marketing of leveraged products, and issuing public apologies for the rushed rollout.
- While domestic retail traders have suffered large losses and political anger has risen, some global funds and banks see the deleveraging as a selective buying chance in chip stocks, and the episode is reshaping flows into emerging-market and crypto markets.